According to the State Bank of Pakistan, Pakistan’s foreign exchange reserves have further decreased to less than seven billion dollars. The economists are expressing fears that making external payments may become a major challenge for Pakistan.
When the central bank released its weekly report, it was stated that the foreign exchange reserves of the State Bank of Pakistan decreased by 784 million dollars in a week. The reason for this shortfall is being attributed to Pakistan International Sukuk and some other external debt repayments.
In the meantime, some payments were made possible by a new loan of US $500 million from the Asian Infrastructure Investment Bank. Now the bank is left with foreign exchange reserves of only US $6.714 billion, which will be repaid in four years.
Thus, in one week, these reserves decreased by ten and a half percent. Moreover, in the 11 months of this year, the reserves have decreased by more than 10 billion dollars.
In October last year, these reserves were said to be more than 17 billion dollars. After the successful no-confidence motion against Imran Khan by the Pakistan Democratic Movement, the foreign exchange reserves of the government that came into existence have so far decreased by more than 4 billion dollars.
Economists say that even now these reserves are not at the lowest level in the country’s history, but their continuous decrease is dangerous. That is because of Pakistan’s debt, interest amount and other international payments in the current year and in the coming years.
There is more to that. The current inflow of dollars into the country’s treasury is very low and the outflow is quite high. The situation therefore is quite alarming due to low foreign exchange earnings and high expenditure.